Hertz 2012 Annual Report Download - page 134

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Donlen Acquisition
On September 1, 2011, Hertz acquired 100% of the equity of Donlen, a leading provider of fleet leasing
and management services. Donlen provides Hertz an immediate leadership position in long-term car,
truck and equipment leasing and fleet management, which enables us to present our customers a
complete portfolio of transportation solutions and the enhanced ability to cross sell to each others’
customer base. This transaction is part of the overall growth strategy of Hertz to provide the most flexible
transportation programs for corporate and general consumers. Additionally, Donlen brings to Hertz a
specialized consulting and technology expertise that will enable us to model, measure and manage fleet
performance more effectively and efficiently. The combination of the strategic fit and expected fleet
synergies described above are the primary drivers behind the excess purchase price paid over the fair
value of the assets and liabilities acquired. All such goodwill recognized as part of this acquisition is
reported in the car rental segment.
The Donlen equity valuation for the transaction was estimated at $250.0 million, subject to adjustment
based on the net assets of Donlen at closing. The preliminary purchase price adjustment at closing
resulted in a downward adjustment of $2.4 million. The final purchase price adjustment, based on the
final Donlen closing date balance sheet, resulted in an upward adjustment of $2.4 million (resulting in a
final closing cash payment of $250.0 million). None of the goodwill recognized as part of this acquisition
is expected to be deductible for tax purposes.
The following summarizes the fair values of the assets acquired and liabilities assumed as of the
acquisition date (in millions):
Cash and cash equivalents ................................ $ 35.6
Receivables ........................................... 64.0
Prepaid expenses and other assets .......................... 7.0
Revenue earning equipment ............................... 1,120.6
Property and equipment .................................. 13.5
Other intangible assets ................................... 75.0
Goodwill .............................................. 51.1
Accounts payable ....................................... (39.3)
Accrued liabilities ....................................... (226.8)
Deferred taxes on income ................................. (121.9)
Debt ................................................. (728.8)
Total ................................................. $ 250.0
Other intangible assets and their amortization periods are as follows:
Useful life Fair value
(in years) (in millions)
Customer relationships .......................... 16 $65.0
Trademark ................................... 20 7.0
Non-compete agreement ......................... 5 3.0
Total ....................................... $75.0
This transaction has been accounted for using the acquisition method of accounting in accordance with
GAAP and operating results of Donlen from the date of acquisition are included in our consolidated
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